The Treaty of Nanking ending the Opium War (1839-1842) between Britain and
China granted all British citizens in China the privilege of
extraterritoriality, under which they were subject to British law but immune
from Chinese law. The privilege was extended to other European nations as well
as to the United States through the most-favored-nation clause. With the
increased suppression of the international slave trade, Latin American planters,
particularly in the Caribbean, turned to China for an alternative source of
labor. They used loopholes in the extraterritoriality clause, fraud, and
coercion to induce Chinese workers to immigrate to Latin America.

The "coolie trade," as it became known, expanded during the 1840s
and 1850s. Some laborers signed contacts based on misleading promises, some were
kidnapped, some were victims of clan violence whose captors sold them to coolie
brokers, while others sold themselves to pay off gambling debts. From 1847 to
1862, most Chinese contract laborers ("coolies") bound for Cuba were
shipped on American vessels, and numbered about 6,000 per year. Conditions on
board these and other ships were overcrowded, unsanitary, and brutal. The terms
of the contract were often not honored, so many laborers ended up working on
Cuban sugar plantations or in Peruvian guano pits. Like slaves, some were sold
at auction, and most worked in gangs under the command of a strict overseer.

At first, the Chinese government did little for the coolies because of its
disapproval of Chinese citizens leaving their ancestral country. When reports of
atrocities mounted, though, the Chinese government promulgated rules to regulate
labor recruitment and working conditions. In 1874, Chinese government officials
were sent to investigate the situation in Cuba and Peru. The result was two
treaties with Spain and Peru, aimed at improving treatment of the Chinese
laborers.

Given the role of American shippers in the coolie trade, U. S. presidents
from Pierce through Grant criticized the practice in their annual messages to
Congress. In 1862, Congress enacted the Prohibition of Coolie Trade Act, which
forbade American shippers participation in the illicit enterprise. By only
allowing voluntary immigrants from China, the United States essentially
prohibited coolie immigration. The Burlingame Treaty of 1868 sustained the
policy of free immigration.

Nevertheless, the term "coolie" came to be applied broadly in the
United States to label most Chinese immigrant laborers. Despite a lack of
rights, these early Chinese immigrants were not coolies. They were voluntary
immigrants who made their own arrangements and paid their own passage. At most,
some borrowed money under the "ticket system" at high rates of
interest. The "coolie" stereotype would be fixed in the American
imagination and used by nativists seeking to stop the immigration of what was
seen as an unassimilable rival labor source.